HOYA CORPORATION
Q1 Financial Results Briefing for the Fiscal Year Ending March 2025
August 1, 2024

[Speakers]

3 speakers
Eiichiro Ikeda
Ryo Hirooka
Tomoko Nakagawa

Director, Representative Executive Officer,
President & CEO
Director, Representative Executive Officer &CFO
Executive Officer & Chief Sustainability
OfficerModerator: We would like to start the Q1 fiscal 2024 earnings presentation for HOYA CORPORATION.
Attending from our side today are Eiichiro Ikeda, Director and Representative Executive Officer, CEO; Ryo
Hirooka, Director and Representative Executive Officer, CFO; and Tomoko Nakagawa, Executive Officer andChief Sustainability Officer.
First, Mr. Hirooka will explain our business performance and the status of each business segment.

Hirooka: This is Hirooka speaking.
First, here are the results of Q1 for the group as a whole.
Revenue was 213.8 billion yen, up 17% YoY and 9% on a constant currency basis. Pretax profit was 64.2
billion yen, up 26% YoY and 19% on a constant currency basis. Operating profit was 58.4 billion yen, up 22%
YoY and up 20% on a constant currency basis. Operating profit margin was 27.3%.
For the group as a whole, sales in the Life Care business, especially eyeglass lenses, struggled due to the IT
incident, but sales in the Information Technology business grew significantly, contributing to the overall
increase in sales and profit. In particular, the Information Technology business performed very well inreaction to the poor performance of the previous year.
Sales exceeded 200 billion yen, a record high on a quarterly basis, due in part to the weak yen. As for pretax
profit and operating profit, there were non-operating income and some foreign exchange gains. In theprevious quarter, FY23 Q4, pretax profit was 72.1 billion yen, but this was due to a large foreign exchange
gain. This quarter's foreign exchange gain was about 2 billion yen, so there is a large difference compared tothe previous quarter. For details, please refer to the bridge chart in the Supplementary Materials to the
Financial Statements.

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Next are the results of the Life Care business.
Sales were 135.0 billion yen, up 6% on a yen basis due to the weaker yen, but down 2% on a constantcurrency basis. Pretax profit was 17.8 billion yen, and operating profit was 17.5 billion yen, for a profit
margin of 12.9%, well below the normal target of around 20%.
In response to the sales decline caused by the IT incident, we chose to aggressively promote sales instead of
cutting costs this time. Since this was a problem caused by the company and not by market factors, we
decided that it was more important to recover sales in a short period of time and regain customer trust thanto prolong the decline in market share. Therefore, we spent more than usual to achieve recovery.
There were some inventory write-offs this time. We consider these factors as a one-off.
As for the outlook for the future, sales are recovering steadily, but not completely, so we will continue tofocus on recovering sales at a cost. we expect profit margins to be several percent lower than our normal
target in Q2 and aim for gradual improvement over the second half of the fiscal year.
While the Company strictly manages its budget on a quarterly basis, it will continue to manage its
profitability by monitoring the recovery of sales in the Life Care business.

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Next, I will explain each division of the Life Care business.
First, eyeglass lenses, this division was most affected by the IT incident. This caused inconvenience tocustomers, especially in Japan, and sales dropped in April. Under such circumstances, we focused on sales
promotion activities and as a result, the sales growth rate for this quarter was -2% on a constant currency
basis, which is better than our initial expectation.
I believe that the expenses we have spent are having an effect, and on a single month basis, we are back toabout the same level in June as the same month last year. we expect to be able to bring it to a level higher
than the previous year in Q2. However, we do not expect to reach the normal growth rate of 4-6% for thisbusiness, and even if we do not engage in large-scale sales promotion activities as we did in Q1, we believe
it is important to spend some money in Q2 and beyond to return to the normal mid-single digit growth rate
and regain market share as soon as possible.

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Contact lenses were not affected by the IT incident. Operations were conducted as usual in Q1 and grew
stably; PB products and new products were introduced, and we will continue to expand our product lineup
while enhancing our services, aiming for stable growth.

Endoscope sales growth was down 12% on a constant currency basis. This was due to a combination offactors. First, the IT incident caused production to be suspended and lower throughput. This resulted in adifficult quarter.
In addition, weak conditions in the Chinese market also had an impact, resulting in a negative 12%.

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The production system has recovered at this point, and the key will be to use this as leverage to recoversales in the U.S. and China, which have been an issue for us.

Intraocular lenses were another business affected by the IT incident. Although not as severe as eyeglasses,
sales declined for a period of time because shipments could not be made at the time of the IT incident andsales did not stand up during that time. As a result, sales growth was only 1% on a constant currency basis.
However, as a business, we are currently operating normally and are steering for growth in the future. One
challenge is that growth in the Chinese market, which has driven our growth to date, has stalled due to thenational volume-based procurement policy (NVBP). Therefore, we need to cover this by introducing new
products in other markets and increasing our product lineup.
Although sales in Europe and Japan were negative this time due to the IT incident, we are of the view thatwithout it, we would have been able to compensate for the sluggish Chinese market.

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Sales growth for other products slipped 2%. There were inventory adjustments in artificial bone-related
products, and the business was also affected by the IT incident. Although there was a reasonable impact forthis business, the scale of this business is not very large, and the impact on the group as a whole was not as
great as that of eyeglass lenses.

Now let's move on to the Information Technology business.
Revenue was 77.9 billion yen, up 45% from the same period last year and up 35% on a constant currency
basis. Pretax profit was 44.1 billion yen, and operating profit was 42.7 billion yen, and operating profit

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margin of 54.8%. Compared to the same period last year, operating profit was up 80% and 70% on aconstant currency basis.
Compared to a year ago, the situation for both LSI and HDD substrates was very bad a year ago, and wehave grown significantly from there. We have also grown significantly QoQ, and demand is stronger than we
had assumed in our annual plan and in the previous earnings announcement, and both sales and profits
have grown significantly.
The details for each division will be explained later, but please understand that the high profit margin of
54.8% is a one-time event. Due to the rapid increase in demand, the HDD substrate production is running at
a very high utilization and hence we will start preparations to restart the plant in Laos. For LSI, we plan tobring forward the expansion of the production line, which was expected in the second half of the fiscal year.
The number of production lines will be increased sequentially.
To summarize, costs related to the establishment of production systems for LSI and HDD will increase fromQ2, and costs will increase with the start-up of the FPD plant in China in the second half. In addition, the FPD
plant has a large CAPEX and will incur a large depreciation burden in the first and second years. Given thesecircumstances, we do not expect the profit margin level of Q1 to continue in the Information Technology
business.

LSI sales increased 45% on a constant currency basis. This is due to the very weak Q1 of the previous year, as
well as the completion of inventory adjustments by customers, which resulted in significant demand as areaction to these adjustments. We expect this high level of demand to continue for some time, but it is likely
to remain at current levels rather than increase quarter by quarter.
Also, when considering the full year, the LSI business has weak seasonality in Q4, and we would like you totake this into account when forecasting annual trends.

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FPD was affected by The IT incident, but the most significant was the earthquake in Taiwan. The earthquake
caused the mask writers to stop working for a certain period of time. As a result, sales were down 17% fromthe same period last year, the only negative growth in the Information Technology segment this time.
However, mask writers are not broken and is currently working properly. As I mentioned earlier about
depreciation, we plan to sequentially start up our plant in China in the second half of the year. We believethat we will be able to strengthen our supply system in the process and return to the original sales level.

HDD substrates grew 53% on a constant currency basis, a situation that is rapidly increasing demand. As for8

3.5-inch, which is the pillar of growth, it is possible that it will exceed the previous peak level in FY2021. On
the other hand, for 2.5", FY2021 was a unique year in which demand for notebook PCs increased due to theimpact of Covid, so the demand for 2.5" is expected to shrink going forward.
Regarding the outlook for the current fiscal year, it is difficult to forecast in some areas because demand
fluctuates so much, but the current situation is that we are operating at full capacity and just barely keeping
up with supply. We have begun preparations to restart the Laos plant that was mothballed and impaired in
Q1 last year, but since it was completely shut down, it will take some time to restart the plant. Preparations
have started, but actual operation is not expected until around Q4. Rather than meeting the current year's
supply, we are preparing for the supply system to be ready for next year and beyond.

Sales growth for imaging products was very strong, up 23% on a constant currency basis. The growth was
mainly due to active demand for mirrorless cameras and automotive-related products compared to theprevious year.
However, we do not assume that this growth rate will continue to rise steadily. It is necessary to carefully
assess at what level growth will settle down or decline in the future. In addition, demand for this businesstends to be concentrated in the first half of the year and then settles down in the second half. Therefore, we
expect sales to settle down in the second half of the year.
The key is to maintain a structure that can reliably generate earnings even when demand falls. This issomething we emphasize every time we do this, and we have in fact established such a structure. For thisreason, a sharp increase in sales like this one has led to a significant improvement in profitability. The
current situation is that the imaging division is contributing considerably to the improvement of the
profitability of the Information Technology business as a whole.

9I would like to briefly touch on balance sheet and cash flow related items.
The share repurchase announced in the last earnings announcement is still in progress and has not yet been
completed.
Cash and cash equivalents increased further. This is because about 70% of cash are held in US dollars, andthe structure is such that when the yen weakens, cash increase in yen terms. Although the recent rapid
appreciation of the yen has caused cash and deposits in yen terms to decline, comparing between the endof June and the end of March shows an increase of approximately 30 billion yen in cash due to foreignexchange alone.
However, we are not changing our view of cash and cash equivalents, a view that it has not increased muchin dollar terms. We intend to continue to return cash to our shareholders in a solid manner so that cash will
not pile up further.

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We forecast Q2 sales revenue of 216.2 billion yen and pretax profit of 65.8 billion yen. Our foreign exchange
assumptions are 150 yen to the dollar and 165 yen to the euro. Given the current level of the yen, there is apossibility that the yen will appreciate more than this, but the comparison with Q1 takes into account the
impact of the yen's appreciation.
With regard to the Life Care business, we are aiming to exceed the previous year's level, especially withregard to eyeglass lenses, but we do not yet expect to reach our normal growth rate. Therefore, we plan tomake investments with the aim of recovering sales. Profitability is expected to improve from Q1, but it is notexpected to reach the normal level. We believe that this is a phase in which we should continue to invest,
even at the expense of profitability.
Overall, we expect both sales and profitability to be substantially higher than in Q1. On the other hand, for
the Information Technology business, we expect it to remain substantially at the Q1 level. We do not expect
profit margins to be as high as in Q1 due to the cost of strengthening the supply system.
This concludes my explanation of our financial performance.

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Nakagawa: This is Nakagawa speaking. First, I would like to report an update on "Environment".
As a new topic, we conducted our second TCFD disclosure. Previously, the disclosure covered the eyeglasslens business and the MD division (HDD substrates), which have the largest emissions, but now we haveadded the imaging business to the disclosure, covering approximately 90% of the total emissions. However,
we have not yet been able to incorporate this into our financial figures, so next year we would like toproceed so that we can show these figures as well. As for Scope 3, it is a lot of work, but we have calculated
the main categories for all businesses, and it will take some time to cover all 15 categories.
In addition, 97% of our emissions come from electricity, and as a member of RE100, we are replacing
energy-efficient equipment to reduce electricity use at our production sites and installing on-site solar
panels.
Since we use a large amount of water in the polishing process, reducing water use is also an important issue
for us. This year, for the first time, we have set a reduction target on a per-unit basis.
As a result of these steady activities, our CDP score increased by two levels to rank B in 2023, partly due toan improvement in disclosure. We have also been working to increase the ratio of renewable energy toelectricity consumption, and last year we increased the ratio to 14%.
In addition, we are currently building an information collection platform covering the entire HOYA Group.
Since we have already made progress in collecting environmental data, we believe that we will be able toexpand disclosure in the future. At this point, we may be overwhelmed with disclosure and regulatorycompliance, but by promoting efficiency in each business from a different perspective, such as energy
conservation, these activities are also contributing to the company's financial performance.

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In the "society" agenda, we focus mainly on human capital and human rights.
We are conducting our employee engagement survey globally and are currently in the process of conducting
our fourth survey. The survey focuses primarily on career development and talent management, with thegoal of improving scores through fixed-point observations.
The ESG Award is an initiative to share divisional initiatives with the entire group and to promote
information exchange and friendly competition among divisions. The awards are open to activities in allareas of environment (E), society (S), and governance (G), and last year we received approximately 50
project proposals. This year's event is scheduled to be held in November.
With regard to human rights, we have reviewed our Code of Conduct for Suppliers, which was established in
2018. This is in response to stricter regulations and standards globally. We are currently in the process oftranslating the new Code of Conduct and will soon disclose it on our website and begin awarenesscampaigns for suppliers.

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Last but not least, I would like to talk about "governance.
With regard to the compensation of Executive Officers, I would like to explain from the perspective of how it
affects ESG. Last June, we increased the percentage of ESG in the medium- and long-term performance of
our executive officers from 10% to 25%. This change in ESG KPIs is approved annually by the Compensation
Committee, and until now has been mainly indexed by external ESG ratings. The said rating will continue forthree years, but this year, in addition, "strengthen IT governance," "promote diversity in management," and"expand learning opportunities for employees" have been added as new indicators.
Regarding the promotion of diversity in management, while more than half of the division managers are
non-Japanese, the ratio of female managers is low. We plan to set and promote targets to address this issue.
With regard to learning opportunities for employees, we offer a variety of training programs globally, but
our goal this time is to focus on reskilling Japanese employees.

14Question & Answer
Moderator [M]: Now, we will move on to the question and answer session. Mr. Yoshida, please.
Yoshida [Q]: My name is Yoshida from CLSA Securities. First of all, regarding the EUV blanks and HDD
substrates, you mentioned at the last briefing that the outlook is under review, but could you give us an
update on the growth CAGR outlook for the next few years, if any?
Ikeda [A]: Demand has recovered rapidly from last year to this year, and we expect the current level toremain flat this year. As for what lies ahead, there are various views internally from bear case to bull case.
With our existing capacity, we believe we will be able to cover the first half of FY2026, but there is apossibility that we will be slightly short of capacity in the second half of FY2026 and beyond. Therefore, wewould like to closely examine capital investment to increase capacity in the second half of this year andmake a decision. The current question relates to CAGR for the next fiscal year and beyond. We are in theprocess of discussing medium-term figures with each customer, so I would like to share the figures beyond
that at the next announcement of financial results or at some other opportunity. This year, we are notseeing a steady increase in each quarter, but we do see that we are once again on a growth trend whenviewed on an annual basis.
Yoshida [Q]: Secondly, regarding the Life Care business, what was the impact on margins of additional sales
promotion expenses and inventory write-downs to recover market share in 1Q? Also, regarding Life Care in
2Q, how much should we expect sales and margins to come back compared to 1Q?
Hirooka [A]: In this quarter, the impact of inventory write-downs is not that large. Also, I hope you can see
the impact of lower sales as more than the impact of increased promotional expenses. In the Life Carebusiness, we would normally expect mid-single-digit sales growth, but currently sales are negative overall.
Considering the movement in Life Care last year, we had sequential sales growth each quarter. This has had
the effect of causing a sudden brake in the market. To ensure that we can continue to grow firmly after sales
recover, we continued with promotional activities, clinical trials, and other measures, rather thanproceeding with cost cutting. Looking ahead, although eyeglass lenses, which account for a large proportionof sales in Life Care, are expected to exceed the previous year's level, Life Care as a whole is not expected toreach its normal mid-single-digit growth rate. We are working to achieve a normal sales growth rate in thesecond half of the year and to return the profit margin to the normal level of around 20%.
Yoshida [Q]: As of 2Q, what is your target for margins?
Hirooka [A]：We expect the margin to be 2% to 3% lower from normal levels, but we believe that the groupas a whole can grow solidly.
Yoshida [Q]: I understand. Thank you very much. That is all.
Moderator [M]: Thank you very much. Next, Mr. Shibano, please.
Shibano [Q]: My name is Shibano from Citigroup Global Markets Japan, and I would like to ask you about
the resumption of operations in Laos. How much will the capacity increase be when the operation resumes?
Do you have any plans to increase production with the introduction of more equipment? Furthermore, canyou explain the necessity of this production increase only by the recovery of demand from existingcustomers, or are there other factors as well?

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Ikeda [A]: As for the Laos factory, we hope to be able to move about 25% worth of the capacity of one
factory in Vietnam in 4Q as the first phase. We have started activities to rehire human resources in 2Q. The
reason for restarting Laos is to meet increased demand from existing customers in the short term, but also
to prepare for the expected increase in the number of customers in the long term.
Shibano [Q]: Thank you very much. Just to confirm, you said that the first phase in Laos will increase thevolume by about a quarter of one plant in Vietnam, but if we return to the scale before the shutdown,
would it be possible to further increase production by about double?
Ikeda [A]: If we move all the lines that were originally in, we can increase the current 25% capacity to about
75%. To increase beyond that, new equipment would need to be installed.
Shibano [Q]: Thank you very much. Regarding the increase in the number of customers, how much more
visibility does the current forecast specifically show compared to three or six months ago? Also, youmentioned that three times the amount of equipment for the first phase of the Laos restart is already inplace; does your explanation of the increased depreciation burden mean that you are looking ahead to this?
Ikeda [A]: Regarding the increase in the number of customers, visibility is definitely increasing.
Hirooka [A]:As far as Laos is concerned, technically there is no depreciation because the asset was impairedin the previous year. Any additional investment will be made after 2026. With regard to Information
Technology in general, the intent of my comment is that a large burden of depreciation expenses will be
incurred especially from the latter half of 2024 to 2025 due to the accelerated start-up of EUV blanks andthe sequential start-up of FPD plants in China from the second half of the year.
Shibano [Q]: That's all from me. Thank you very much.
Moderator [M]: Thank you very much. Next, Mr. Katsura.
Katsura [Q]: My name is Katsura from SMBC Nikko Securities. You mentioned earlier that Mask Blanks willremain at roughly the same level this fiscal year. Is the direction of HDD QoQ also the same? Could you tell
us about the quarter-by-quarter fluctuations, taking into account seasonality and other factors? Also, a hard
drive manufacturer commented that they will start mass production of HAMR drives around the middle ofnext year. What kind of impact do you expect from this delay?
Hirooka [A]：We are assuming an increase or decrease from the level of Q1, but HDD substrates willcertainly be lower in Q4 due to factory operation days, so the first half and the second half will not be thesame. Although there is a possibility that capacity will increase from the current level, it will be difficult tosignificantly increase it in QoQ.
Ikeda [A]: Even if mass production of HAMR is delayed, we do not expect a significant impact on our
demand for glass substrates, as normal drive manufacturing will continue.
Katsura [Q]: Thank you very much, the second point is about FPD. With regard to your joint venture in
Chongqing, China, you mentioned that the burden of depreciation will increase. Are there any subsidies in
China? Also, I don't think this business can necessarily be called a "big fish in a small pond," but how do you
view it?
Hirooka [A]:I can't be specific about subsidies, but they may not be at a level that will have an impact. Thereis not a lot of competition for large masks for FPDs, so if we can secure customers and sell high-definition
products, it is not a bad business. The depreciation burden is set to end quickly, and we are making

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investments from a cash flow perspective. As the depreciation burden decreases, it is expected tocontribute to the profitability of the Information Technology segment.
Ikeda [A]: Our term "small pond" refers to a segmented market where there are not too many competitors
and where we can aim to gain a certain market share. In the FPD business, we have newly defined China,
where the panel market is growing at a high rate, as a "small pond”. The launch of the China plant isintended to shift the main market and supply capacity to China, rather than to significantly increase thecapacity of the FPD business as a whole. Based on the above, we are partially reallocating equipment to the
China plant from our existing production facilities outside of China.
Katsura [Q]: I understand very well. Thank you very much.
Moderator [M]: Thank you very much. This concludes the briefing. Thank you for taking time out of yourbusy schedule to join us today.
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